A VIEW FROM WELLINGTON

NZ must lift study if trade with Indonesia is to take wings

Duncan Graham, a freelance journalist and the author of the Indonesia Now blog, says New Zealand risks being left behind in its quest for a slice of Indonesia’s expanding economy because of a lack of knowledge about the country and its people.

A key principle in business is “know your customer”.  We don’t yet properly understand Indonesia, but we can prepare – and discover new friends.
This winter, 52 Kiwi businesspeople returned from an 11-day visit to Indonesia, wallets stuffed with name cards, briefcases plump with memoranda of understanding – even a few contracts.
The Indonesian economy has wings – literally. Last year 70 million passengers flew across and around the archipelago. By 2015, it should be 100 million. Five new aircraft are delivered every month.
In the trade mission’s front row was the aviation industry, keen to sell equipment and services, including pilot and English language training.  New Zealand bankers, manufacturers, food exporters, engineers and academics – among others – were also rattling their products in Jakarta, Bandung, Surabaya and Bali.
By all accounts it was a worthwhile follow-up to Prime Minister John Key’s visit to Jakarta last year.  This came after the two countries formalised a free trade agreement.

Indonesia's expanding middle classes have cash and needs, says Duncan Graham

In regards to our relationship with Indonesia, we have many advantages. Foremost is that we are not Australia.  Australians have a testy relationship with their northern neighbour.
Earlier this year the Australian Government commissioned an attitude survey.  It found that nearly half the respondents saw Indonesia as a threat to national security, while most didn’t realise the world’s fourth-largest nation was a democracy.
It would be good to think Kiwis have a higher knowledge level, but similar research in New Zealand would probably reveal that few know where Indonesia lies.
Another plus is our position as one of the world’s least corrupt countries. That makes us a beacon of trust to a nation that ranks 118 on Transparency International’s index of perceived corruption.
Yet despite these attractions, we’re making little headway with attracting young Indonesians to New Zealand for study.
The government has set a target of 4,000 fee-paying Indonesian students in New Zealand by 2017. So far our Jakarta office has issued only 332 student visas in the past two semesters.  That’s up just 107 from the previous academic year.
Even distant, cold and costly Canada is reported to be attracting more students, because it’s spending serious money on marketing. We’ve allocated only $7 million. That’s not serious.
About 70,000 foreign students are in New Zealand. Currently, the largest number come from China, reflecting our past policies focusing on that country.
Now we’ve started notice Indonesia, recognising that its GDP should exceed six per cent this year, and its expanding middle classes have cash and needs. Penetrating this market of almost 250 million is likely to be tough, so thorough preparation is required.
That means understanding the culture and language – which is where we’re floundering against our competitors.
Indonesian isn’t taught in our schools. Asian studies are offered at a few campuses but there are no full-time, stand-alone Indonesian courses. No schools have put up their hands for Indonesian teacher aides, who are eligible for work visas under the agreements signed surrounding the FTA.
Kiwis doing business in Indonesia know little more than greetings in the language. Much of the promotional material distributed by delegates on the trade mission was in English. Trade Minister Tim Groser (who wasn’t on this trip) speaks Bahasa Indonesian.  So does Jakarta Trade Commissioner Tim Anderson and other top Embassy staff.  They are exceptions.
The story gets worse. A nationwide appeal for New Zealand cities to explore partnerships with Indonesian towns has garnered zero response. 
Next year, Indonesians go to the polls to elect a replacement for President Susilo Bambang Yudhoyono, who will have reached the end of the allowed two terms.
Many of the candidates have military ties pre-dating democracy, and of those considered to be in the running, none are as pro-Western as the incumbent.
That’s all the more reason for us to study and understand the needs of a major customer that wants our produce. Any cultural missteps could seriously jeopardise trade and undo all our good

(First published on the website of the Asia NZ Foundation www.asianz.org.nz)